You may think that signing a land lease is simple and that you don’t need any help as it’s ‘just a lease’. However, dealing with rural land leases can be tricky because there are so many different types, each with its own rules and ‘hooks’. Unlike buying a house, which is pretty straightforward and well regulated, with one approved form of sale and purchase agreement used for these transactions, rural land leases can vary a lot. For example, a 5-year lease costing $100,000 a year is like committing to a $500,000 property purchase. You wouldn’t buy a house without seeking legal advice before entering into the contract, so you shouldn’t enter into a land lease without doing your homework first, and getting good advice, either.
Rural land leases can include various terms and conditions that might not be immediately obvious. These can cover everything from the specific use of the land, maintenance responsibilities, and even environmental compliance obligations. For instance, some leases might require the tenant to maintain fences, manage pest control, or adhere to specific farming practices to protect the land’s environmental baseline or even to enhance the farm’s sustainability rating.
Getting advice from a legal professional is crucial. We can help you understand the lease terms, like how long it lasts, renewal options, and rent reviews. We can also explain your obligations when the lease ends (for example new grassing provisions) and also help negotiate a fair position with the landlord.
The New Zealand Law Society stresses the importance of knowing what you’re signing up for and getting legal advice. Leasing lawyers are great at balancing the power between tenants and landlords, making sure the lease terms are fair. We can help you understand your obligations, costs, lease length, renewal rights, rent changes, subletting, and cancellation terms.
Additionally, getting legal advice can be invaluable when it comes to understanding your rights and responsibilities under the law that are outside of the lease. For example, rural tenants have the same obligations under the Resource Management Act 1991, Building Act 2004, Biosecurity Act 1993, Freshwater Regulations, as the owner of the property. We often find clients tend to agree to the rent at the beginning without any consideration for any other liabilities that might arise during the lease term - early advice is always advisable.
Getting legal advice for land leases in New Zealand is just as important as when you’re buying a house. It helps protect your financial and legal interests in the long run. By ensuring that you fully understand the terms of your lease and your legal obligations, you can avoid potential pitfalls and make informed decisions about your investment.
